PA DHS Secretary testifies on Healthcare

PA DHS Secretary testifies on Healthcare

Wolf Administration Testifies on the Impact to Pennsylvania of the Proposed Affordable Care Act Repeal and Replacement
Proposal could lead to a $15-30B loss in Pennsylvania in the next decade.

Harrisburg, PA – Today, on behalf of Governor Tom Wolf, Pennsylvania Department of Human Services (DHS) Acting Secretary Teresa Miller testified before the United State Senate Finance Committee on the impact of the Graham-Cassidy-Heller-Johnson Proposal. The proposal is the latest Republican effort to repeal and replace the Affordable Care Act (ACA) that has benefitted more than 1.1 million Pennsylvanians.

“The proposal would make draconian cuts to federal health care funding and force governors across the country to make the most gut-wrenching decisions they could possibly face,” said Miller. “Governor Wolf and I share the goal of ensuring that Pennsylvanians have access to affordable, high quality health care services so that they can lead healthy and productive lives. I’m proud to say that the commonwealth has been diligently working toward that goal, and has made significant progress thanks in large part to the ACA.”

Prior to implementation of the ACA, Pennsylvania’s uninsured rate was more than 10 percent. Today, the commonwealth’s uninsured rate is 5.6 percent; the lowest it has ever been.

According to the Kaiser Family Foundation, the proposed health care bill includes a block grant that would lead Pennsylvania to lose billions of dollars in federal funding; 34 other states would also see reduced funding. Pennsylvania would lose between $15 – $30 billion in federal funding over the next decade. Additional key provisions of the proposal would:
• Repeal the ACA Medicaid expansion and individual insurance market subsidies—including premium tax credits, cost-sharing reductions, and the basic health program—as of 2020.
• Convert federal funding for the traditional Medicaid program to per capita caps that would limit the amount of federal funds regardless of expenditures.
• Repeal the penalties under the ACA’s individual and employer mandates and allow states to waive benefit requirements and community rating in the individual and small group markets.
• Fundamentally alter the current federal approach to financing health coverage for more than 80 million Americans who have coverage through the ACA or through the traditional Medicaid program.

The block grant program would replace the ACA’s Medicaid expansion and insurance subsidies, for years 2020-2026 and replace the current federal funding formula with a fixed amount regardless of future growth in the program. States would have to use the fixed amount of funding and make the tough decision of whether to cover the cost of high-risk patients, assist individuals with premiums and cost-sharing, pay directly for health care services, or provide health care coverage to a limited extent to people eligible for Medicaid expansion.

“I truly believe states are in a better position to make decisions impacting our residents,” said Miller. “We know our markets better and we are more nimble and able to respond to issues impacting our consumers. When we hear that you want to give us more flexibility as states, we are interested in hearing more. However, as it stands, I don’t believe that this flexibility exists.”

The proposal’s sponsors say that they want to turn power over to states to create their own health care system, and claim to do so by creating a block grant that levels the playing field between Medicaid expansion and non-expansion states. This creates an insurmountable burden on states that want to maintain their current coverage levels, let alone expand them.

For some states, this may be an opportunity to craft a health care system as they see fit, but given how federal funding is projected to decrease over time compared to funding levels if the proposal weren’t enacted and the fiscal cliff if the block grant funding ends after 2026, this flexibility is illusory.

“At some point, all states will be left to fill sizable gaps in their state budgets, and we will likely see legislative crises to make up the funding loss,” said Miller. “States will be forced to either enact significant tax increases, or impose benefit reductions, or both. Is that really the flexibility we need?”

Medicaid is critical to Pennsylvania and serves 2.8 million people, or 22 percent of the commonwealth’s population. This includes 1.2 million children, nearly 250,000 seniors, 503,000 individuals with a disability, 565,000 individuals who receive outpatient mental health services, and 215,000 individuals relying on substance use disorder treatment. In 2015, Medicaid paid for over 58,000 births in the commonwealth – nearly 40 percent of Pennsylvania’s total births. When Governor Wolf expanded Medicaid in the commonwealth more than 710,000 people gained access to health care coverage.

“It’s unfortunate that Congress is again considering rushing through a major reform of our health care system, rather than pursuing a bipartisan, consensus-driven effort to enact targeted reforms to stabilize our markets and ensure the ACA works better for everyone going forward,” said Miller. “On behalf of Pennsylvanians, on behalf of our children, seniors, and individuals with disabilities – our most vulnerable populations – I implore the Senate to return to the bipartisan process that they were engaging in earlier this month, and craft a compromise bill to stabilize the individual market and improve our current system.”